Six Secrets to CEO Success

Steve Tappin and Andrew Cave noted in their 2008 book, The Secrets of CEOs, that two-thirds of company CEOs struggle in their roles and don’t know where to turn for help.  

While countless authors, researchers, and CEOs themselves have tried to bottle and sell the fairy dust of CEO success, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest, a new book out this month from three senior partners at McKinsey & Company, offers a fresh perspective and new guidance for understanding and navigating the complex dynamics of the chief executive role.

Based on interviews with 67 CEOs of top quintile performance companies – that have collectively generated over $5 TRILLION in company value during their tenures in the role – from Satya Nadella and Reid Hastings to Jamie Dimon, Mary Barra and more, they lay bare the most fundamental commonalities between these uncommon leaders and illustrate them with vibrant stories from the road. But before diving into key success factors, the study offers a new definition of the CEO role itself.

Understanding the Ask

Before you can speak to what drives success for a CEO, you have to understand what it is he or she is tasked with accomplishing. The CEO role, the authors argue, isn’t intended to be a catch-all for ‘do everything.’ It ultimately encompasses six core responsibilities:

• Setting direction
• Aligning the organization
• Mobilizing through leaders
• Engaging the Board
• Connecting with stakeholders
• Maximizing personal effectiveness

The key isn’t for the chief executive to be an expert at all six or to march through the list checking each one off in turn. Even the best CEOs typically only do two or three of the above things exceptionally well. The top job is more about having the ability to drive for excellence and integrate efforts across each area, making adjustments as needed to maintain balance in the organization. Much like the captain of a ship, all six areas must be actively managed in parallel so that no one thing sinks the ship.

Not only do CEOs have to manage six processes that are each far from simple, their job is to do so while considering the opposing dynamics a CEO must reconcile. How to weigh short-term impact with long-term goals? Shareholder versus stakeholder interests? Speedy versus fact-based decision-making? Their need as a leader to act with confidence while also being humble enough to ask for help?

Driving Success with Mind Over Matter

The book ultimately posits that success can be boiled down to the mindsets with which they address each of their responsibilities. This unique group of high performers was committed to learning and open to growing from their experiences. Few if any CEOs arrive at their role with all the answers. Their styles and skills evolve over time along the journey. Failures happen along the way. But in telling the stories that have defined key moments in this group’s careers, six clear mindsets – one for each of the responsibilities of the CEO role – emerged.

While these mindsets obviously aren’t instruction manuals in and of themselves, they do offer guidance on how to approach questions in a way that helps them leverage more of the resources they have at hand (like the Board and other stakeholders), build organizational structures, habits & ideologies to support objectives (like team dynamics or cultural competencies), and prioritize the big things (in their own agendas and in the company’s). The mindsets are:

1. Be Bold. In setting direction for their organizations, they believe fortune favors the bold. While they hadn’t all taken “bet the company” type risks, they believe in making bold choices, for example in reframing what success looks like for their organization.

• Treat the Soft Stuff like the Hard Stuff. In aligning their organizations, they share a strong belief that without culture, a strategy can’t succeed. These CEOs were very intentional about how they defined and cultivated culture, and about actively managing it through regular measurement.

• Solve for the Psychology of the Team. In mobilizing the organization through its leaders, they focus more on managing the team dynamics than its operating mechanics. In very thoughtful ways, they spend energy teaching their teams to engage effectively with each other, even when it feels counterproductive in the moment.

• Help the Board Help the Business.  In engaging the Board, they don’t act like gatekeepers. They get out of the way and prioritize giving Board members exposure to the business and team as a means of leveraging more great minds to drive toward objectives.

• Start with Why. In connecting with stakeholders, great CEOs first seek to understand. They listen and learn, from those with a different vantage point than theirs. They keep the discussion proactive – at the level of “why” – rather than diving down to the details of what and how.

• Do What Only You Can Do. In ensuring personal effectiveness, they don’t ask what they’re needed to do, but what only they can do. They recognize that they hire great talent and let them do their jobs. Their role as the integrator and the leader is to conserve their own energy and focus for the things that only they have the vantage point and authority to do.

“It’s lonely and frustrating because of information asymmetry,” noted Satya Nadella of IBM. That’s both the advantage and the curse of the CEO role, and points directly to the uniqueness of a job that requires one person to be strong enough to manage so many vectors, without allowing their influence create a spike in any one of them. It’s a great exercise in perspective, for one.

While this simple framework offers a clear glimpse into the mindsets that set great CEOs up for success, it’s the stories that bring the model to life and offer actionable insights for real life. At the end of the day, it’s not skill, experience, luck, or perseverance. It’s not being a subject matter expert in any one area or function. While those all help, as the ultimate integrator of company success day in and day out, it’s the mindsets they bring to the role that matter.